The Assets

Seas - the assets
Many of the important metals needed to fight tomorrow s wars are lying in ‘nodules’ on the ocean floor. Mike Rose explains how these have proved a stumbling block towards international agreement on the Law of the Sea.

WHAT benefits will Bolivian farmers or Kampuchean refugees get from the new Law of the Sea signed last December in Jamaica? Theoretically, a slice of the vast wealth at the bottom of the oceans, a Pandora’s box of mineral riches.

For one of the Law’s fundamental principles is that the immense maritime area located outside nations’ territorial waters is ‘the common heritage of mankind’ and the resources therein are ‘vested in mankind as a whole’.

But hopes that a new world economic order could emerge from the communitarian exploitation of the sea’s mineral wealth were frustrated at the outset by the refusal of the world’s technological heavyweights to sign the United Nations-sponsored law.

After a quarter century of endless debates, conferences and symposia, the most protracted negotiations in the history of the UN, 119 nations signed the treaty, which needs to be ratified by at least 60 nations over the next two years before it becomes binding international law.

Missing from the signatories, however, were 22 of the world’s industrialised nations, amongst them the United States, Japan, Britain, West Germany, Italy and Belgium, which found the treaty unacceptable in its present form. And it just so happens that these are the nations with the technological muscle and expertise and the financial resources without which the whole sea-bed mining project could be a non-starter.

Leading the dissenters is the US, which claims that the part of the treaty covering sea bed mining is restrictive and inhibits private enterprise, making it adamant in its refusal to sign. So much so that the Reagan administration is even trying to finalise a rival treaty with Britain, West Germany and France enabling each to mine on its own, ignoring the global rule.

Putting pressure on Washington is a powerful lobby of transnational mining corporations alarmed at the idea of an international body under the auspices of the UN dedicated to a form of global revenue that could set up a truly multinational enterprise which will compete with them.

UN economists Dr Frederick Clairmonte and John Cavanagh stress, however, that the new agreement provides a clear legal framework for commercial operations for the first time, permitting the private mining consortia ‘a stability of expectations which hitherto they did not have.’ They point out that the treaty is mainly concerned with production, leaving corporations to control processing. marketing and distribution of the minerals —hardly unprofitable activities in themselves.

But still the US refuses to be swayed. Underlying its reticence is the prospect of losing exclusive control of vital strategic resources which are well within its capacity to exploit. Minerals conservatively estimated at $3,000 million at today’s market price are found on the sea bed in potato-sized nodules which contain manganese, cobalt, copper and nickel.

Cobalt, particularly, is a vital ingredient of military hardware and the US currently imports 95 per cent of its cobalt and manganese from Third World nations such as Gabon and Zaire. As such, it feels vulnerable to often unpredictable political changes which would be absent if it had free rein to exploit the sea bed. And in signing away that freedom, the Reagan administration fears, among other things, a gradual dimunition of US global economic and political influence; a greater susceptibility to political blackmail; and the excessive bureaucratization of what it considers to be essentially a commercial venture.

Thus, states a senior US spokesman, ‘if there is going to be any mining of the deep sea beds, it’s going to have to come outside of the Law of the Sea treaty’. All this seems a far cry from the Carter administration’s special envoy, Elliott Richardson’s 1980 statement that the treaty would be ‘the most significant single development of the rule of law since the founding of the United Nations itself.’

Echoing the US sentiments, not surprisingly, is the Thatcher government in Britain, despite the fact that it voiced no objections when the Commonwealth heads of state agreed to support the convention when they met last year in Australia Both Australia and New Zealand are said to be shocked at Britain’s apparent volte face and Nigeria has sharply criticised the British. But Britain is by no means at the forefront of deep sea mining research, a consortium comprising Consolidated Gold Fields, Rio Tinto Zinc and British Petroleum having invested only $12 million until quite recently.

The West Germans have also taken a similar view to the US and have been avidly pursuing a policy of bilateral negotiations with several nations, including Saudi Arabia and the Sudan, to carry out exploratory surveys in their vicinity. And the French are seeking the best of both worlds, having signed the UN treaty whilst also subscribing to the US position. Japan similarly appears to be taking an ambivalent stand, acknowledging the benefits and justice of the treaty yet refusing to sign in Jamaica

So it looks, for the time being at least, that it’s business as usual for the advanced industrial nations of the West, with a genuine opportunity for global co-operation subordinated to private gain And the International Seabed Authority (ISA), the autonomous organization set up to regulate the exploitation of the sea beds mineral resources ‘for the benefit of all mankind’ is likely to belittle more than a paper tiger with a loud roar and toothless bite.

This is not to say that the negotiations have proved an unmitigated failure at every turn. Far from it. Indeed, many of the conventions have long been accepted as internationally binding, amongst them the twelve mile territorial limit, the 200 mile exclusive economic zone, freedom of the high seas, the limits of the continental shelf and freedom of man-time transit and right of access to the sea for landlocked states.

Broadly speaking, indeed, there is a con-census on most matters covered by the Law of the Sea It is undeniably the issue of seabed mining and its vast potential for wealth creation that has raised the most controversy.

There are several sticking points. One is the amount that private contractors should pay to the Seabed Authority for the right to exploit each mine under a 25-year licence. After much haggling which elicited proposals as divergent as $1600 million from India and $372 million from the US, the conference settled on a figure of $437 million, a figure with which the US delegation was said to be ‘less than happy.’

And, apart from the provision for the Seabed Authority to create a commercial mining enterprise which the US and its allies see as a competitor, there is the thorny problem of the transfer of technology.

The treaty stipulates that any private contractor which receives a licence to mine is obliged to transfer to the Authority the requisite technology in exchange ‘for a fair and equitable commercial settlement’ But the ‘high-tech’ heavyweights balk at this clause. They argue that the huge investment necessary to start such a venture will be scarcely worthwhile if the competitive edge gained in private research and development is lost in the mandatory transfer of technology to third parties — and competitors at that.

Such fears are groundless, argue experts at the University of Manchester’s Marine Resources Centre in the UK. They point out that many of the conditions relating to technology transfer are purely hypothetical since the degree of expertise and level of technology and investment are so great that the International Seabed Authority would be unable to go it alone and would be forced to operate as part of a joint enterprise with private consortia.

And surely this hits on the crux of the whole problem. Despite the rhetoric and high ideals contained in the principles of the Law of the Sea, it is only the rich nations with their technological mastery and financial resources who will ultimately prosper to any real degree, either within or outside the terms of the treaty.

For it is only they and the multinationals who will be able to master the wherewithal to embark on such colossal projects. Even with the adherence of these rich nations, the ISA would only be the country cousin picking up the crumbs.

And if, as at present seems likely, the Authority allocates profits according to the share of each nation’s initial investment (which will be in line with its share of funding the ordinary UN budget), what chance will the poor nations have of receiving anything but the merest pittance?

It is doubtful that landlocked states like Laos, Mali, the Central African Republic and Bolivia will have opportunities of reaping the same benefits as advanced industrial nations like Switzerland and Austria.

Our Bolivian farmers or Kampuchean refugees are more likely to come into contact with the fruits of the sea in the shape of bullets and bombs.

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